The financial markets began this morning with a great calm, with a rebound in stocks, stability in bond yields, and oil regaining its footing.

These movements are based on a struggle between two main narratives, the first of which currently has the upper hand — namely:

The expectations of a less bumpy journey towards a fairer trading system where the United States gets concessions from its trading partners in a world of generally low tariffs, and markets receive help from more flexible financial conditions as the Federal Reserve implements the four cuts currently set by traders.

On the other hand,

There are more difficulties ahead as prolonged negotiations continue, with reciprocal tariffs dominating in the meantime, and the Federal Reserve facing constraints due to high inflation rates, forcing markets to reprice growth expectations outside the United States.

#economy #markets #tariffs #trade